Establishing legal presence

A company may start operations in Azerbaijan from the moment of state registration. Currently, the registration of commercial legal entities is carried out by the Ministry of Taxes of the Republic of Azerbaijan.

Without formal registration with the Ministry of Taxes, a company may not open a bank account, clear goods through customs, etc. A new system of corporate registration for commercial entities has been in place since 1 January 2008, which significantly simplifies the registration process for legal entities. The registration of legal entities is now handled through a single state authority (“one-stop-shop”) – the Ministry of Taxes. Upon submission of all required documents, within 2 business days the Ministry of Taxes issues an extract from the state register and a unique tax identification number. An “online registration” system of legal entities has been available since January 2012 for limited liability companies with local investment.

There are numerous forms in which a legal entity/company can be incorporated in Azerbaijan. There are no specific rules for the incorporation of companies by foreigners, apart from the standard legal and translation requirements. In general, foreign businesses tend to open representative offices/branches or register (incorporate) a local company.

The Law “on State Registration of Legal Entities and State Register” sets out the requirements of the legal registration process. 

You may start your own business in Azerbaijan with 100% foreign investment or form a joint venture with a local partner. There are no specific requirements for the size of share or legal limitations for the foreign component in a company and investment. With the exception of certain licensed activities described below, there are no additional general approvals or permissions apart from state registration for the start up. 

A certain, limited number of documents must be submitted to the Ministry of Taxes for registration purposes (for foreign participants/shareholders, these documents include, inter alia, notarized/apostilled extracts from the companies' register, company charters and documents on corporate governance). Azerbaijan is a party to The Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, and the legalization requirement has ceased to exist in respect of documents produced and executed abroad in the convention’s member countries.

The state duty is AZN 220 for the registration of banks, stock exchanges, insurance companies, and representations and branches of foreign legal entities, AZN 3 for the registration of legal entities involved in agricultural business, and AZN 11 for all other legal entities. 

Azerbaijani law generally recognizes the following types of commercial legal entities (commercial legal entities are defined as those operating for profit):

LLCs and joint-stock companies are the most popular choices for incorporation. Please see this table for a brief comparative analysis of these two types of legal entities.